Big Funds Bet $150 Million on Mobile Security Startup Lookout

Lookout’s app for Android scans downloaded apps for malicious code and checks to see what data they collect on users.

Lookout Inc.

Mobile software startup Lookout has raised one of the largest private investments in cybersecurity, accepting $150 million from some big fund managers to lock down smartphones showing up at corporate IT departments.

Some of Lookout’s previous venture-capital investors also participated, including Accel Partners, Andreessen Horowitz and Khosla Ventures.

Smartphone security remains a tricky problem for companies, governments and consumers as the gadgets now act as small computers that constantly switch between different Internet connections. In the meantime, the phones have access to corporate systems, are littered with software for personal use and often aren’t updated regularly.

Lookout, a San Francisco company started in 2007 by hackers, has tried to solve the security conundrum with an app. The software, preinstalled on phones from some carriers and available in both Google 's and Apple 's stores, acts as a sort of surveillance system for phones. On Android, it scans downloaded apps for malicious code and checks to see what data they collect on users. There is also a find-my-phone feature that can take pictures of phone thieves as they try to log into a stolen device.

Partly because of the way Apple crafted its mobile software, Lookout is much more limited in the data it can monitor on an iPhone. In that version, the software alerts users if they have old versions of apps with known security issues or whether certain apps are tracking their location.

The company faces competition from traditional computer security companies, such as Symantec, Trend Micro and Kaspersky Lab, which offer their own mobile programs. But Lookout has attracted attention from investors because it already counts 50 million users and comes preinstalled on phones available at several major carriers including AT&T, T-Mobile and Sprint.

It offers the basic software to consumers for free but charges for advanced features — such as the ability to wipe data from a stolen phone — and for large business contracts.

But Jim Dolce, Lookout’s chief executive, warns that no one has yet figured out the key to keeping all of the hackers out of phones.

“This is going to be an ongoing battle that will likely last for a very long time,” he said.

Dolce declined to disclose the valuation of Lookout. “You can imagine a round of this size had a substantial valuation,” Dolce said. When Lookout raised $55 million in a round led by Deutsche Telekom last fall, it valued the company at more than $1 billion, two people familiar with the matter have said.

Dolce said he plans to use the money to build more software for business-user security, though he declined to elaborate. Lookout will also look for ways to get its programs on to phones through business suppliers, rather than just app stores and carriers.